I recently plunked down a deposit for a Nissan LEAF - the world's first all-electric car, which is destined to hit the United States in big numbers.

I figure since I work from my home office and don't drive much, I'll use the Nissan as my everyday car and leave the gas-guzzler for longer trips.

A Nissan engineer will shortly be visiting my home to make sure I have enough power to handle the LEAF's charging requirements. But as a degreed electrical engineer, that won't be a problem. When I restored my 200-year-old house, the electrical infrastructure became my pet project! I should have plenty of power.

Jet across to California, however, and anyone willing to drive an electric car will be in for a rude awakening when it comes to charging them...

The California Electric Car Market: Land of the Free, Home of the Green

Think of electric vehicles and one of the first places that springs to mind is California. You don't have to go far before you come across a Toyota Prius or Honda Insight.

In fact, a U.S. Department of Energy survey from 2007 (the latest data available) revealed that there are more than five times as many hybrids registered annually in California than the next six states combined. And 25% of all hybrids sold are purchased in California.

That shouldn't be surprising. Despite its fiscal problems, California is often the vanguard state for anything new. It's no accident that Silicon Valley is located there.

It's also at the forefront of the green movement. For example, it was the first state to adopt a renewable energy mandate. As part of that, its goal is to return the state's carbon dioxide emissions to pre-1990 levels by 2020.

With regard to the auto market, Nissan, General Motors and a number of other manufacturers are gearing up to unleash plug-in hybrids and full electric vehicles - many of which will be plugged into the California market.

And therein lies the source of the problem...

California's Shaky Electric Infrastructure

You see, California's shaky electric infrastructure is far from able to handle the onslaught of thousands of electric vehicle owners all "plugging in" when they get home at 5:00 PM.

That's precisely the time that electricity demand peaks for other reasons. Televisions, computers, video games, air conditioners, stereo systems and lights all get fired up when people return home from work.

It's the time of the day when there's little power capacity to spare... if any. Just ask any California resident about brownouts and blackouts. Many are familiar with them.

Now add the power drain to charge an electric car. Depending on the vehicle's battery pack size, the power draw could approach that of an average sized home. And that's a problem because utility companies generally size their electric grids based on the number of homes in a development, plus a safety factor of some magnitude. But it's not 100%. And they weren't banking on electric cars sucking up power, too.

In fact, a study from the National Renewable Energy Laboratory estimated that Plug-in Hybrid Electric Vehicles (PHEVs) would increase annual energy demands by anywhere from 6% to 12%, depending on the region of the country. California was one of the highest regions cited in the study.

Until recently, no thought was ever given to the significant draw that charging electric vehicles would add to the grid load. The problem - and the scale of the fix - is unprecedented...

Operating Under Electric Gridlock

Put yourself in the position of utility companies that operate the electric grids...

How the heck do you know who is going to buy electric vehicles and where they live?

Do they live in areas with excess grid capacity?

What if everyone in the same neighborhood buys one?

The problem isn't additional generating capacity. It's making sure the distribution part of the power grid can handle the increased loads, wherever they are.

The utilities are meeting with electric vehicle manufacturers and studying demographics in an attempt to get a handle on the problem. They're pouring millions into upgrading neighborhood distribution grids, targeting areas most likely to harbor large numbers of electric vehicles. And it's a race against time, as vehicles will begin arriving later this year.

So how are the wheels of government in California going to handle the problem?

Why... just like many governments do, of course: Through additional regulations...

The Dreaded "R" Word

The California Public Utilities Commission (CPUC) is in the midst of formulating its first key regulatory ruling regarding electric vehicles.

The problem lies in the current CPUC regulation that allows only electric utilities to sell electric power. So it's contemplating whether electric vehicle-charging companies are "utilities" and are therefore subject to CPUC rules.

Huh? There's no question that they're not utilities and it leaves the CPUC little choice as to its decision.

With the onslaught of electric vehicles, "Pay for Power" stations are likely to spring up at gasoline stations, shopping malls, parking garages, workplaces and along busy metropolitan streets.

And the most sensible way to handle these companies would be to let the market dictate prices. Competition is a wonderful thing, after all. Other state PUCs are closely watching what's happening in California.

And for investors?

Playing the Electric Vehicle Power Game

Some of the biggest beneficiaries will be the companies who ultimately provide the power for electric vehicles.

But it will be the metering/recharging station equipment makers that will see their businesses take off, as the electric vehicle infrastructure build-out gets underway in earnest.

In fact, an estimated five million charging stations will be deployed worldwide between now and 2015. (The variability of the number depends in large part on how quickly national, state and local governments adopt incentives to promote electric vehicles.)

Right now, the electric vehicle-charging market is led by via niche players like...

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